CBRE's earnings drop 38% in Q3

New York-listed real estate services firm CBRE saw net income fall 38% to $40 mln in the third quarter of 2012 compared to $64 mln in the same period a year before.

The drop was mainly due to $44 mln in charges related to the acquisition of the ING REIM businesses as well as intangible asset impairment and cost containment expenses. Excluding these charges, net income was 8% higher in Q3 2012, at $84 mln, versus $78 mln a year before.

Revenue for the quarter amounted to $1.56 bn, up 1% from $1.53 bn in the third quarter of 2011.

Geographically, the Americas was the company’s best-performing region, with 4% overall revenue growth. EMEA revenue fell 17% primarily due to the continued effects of sovereign debt issues. On a positive note, the UK business proved resilient, with overall revenue edging up 2%.

The region reported an operating loss of $32 mln, compared with operating income of $17.5 mln for the same period in 2011.

'Many investors and occupiers turned more cautious in the third quarter,' noted Brett White, CBRE’s chief executive officer. 'Concerns about Europe's ongoing sovereign debt crisis and Asia's slowing growth, which have been weighing on markets for most of the year, were heightened by unease about weakening corporate profit outlooks as well as US fiscal policy and political uncertainty. CBRE was not immune from these macro trends.'

The company has taken steps to further align its cost base with reduced business volumes in certain parts of the business, he added. 'This was particularly true in Europe, where the ongoing debt problems continue to adversely affect transaction activity, most notably in France.'

Outsourcing continued to grow solidly, with revenue up 7% globally. CBRE remains at the forefront of an industry-wide trend in which property occupiers are hiring third-party service providers to manage their real estate in order to reduce costs and improve efficiency. The company signed a record 67 total outsourcing contracts in the quarter, surpassing its previous record achieved in the first quarter of 2012.